THE EUROPEAN SCHOLARSHIPS DECREASE AT MID-SESSION
–
by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to drop slightly and the main European stock markets retreat on Monday at mid-session, tensions between the United States and China and the deadlock over Brexit fueling risk aversion against a backdrop of deterioration of the health crisis.
New York index futures are signaling a Wall Street opening down about 0.4% for the S & P-500 and Dow Jones and almost at break even for the Nasdaq. In Paris, the CAC 40 lost 0.74% to 5,567.58 around 12:12 GMT and in Frankfurt, the Dax gave up 0.32%. Conversely, the FTSE in London gained 0.77%, supported by the sharp decline in the pound sterling.
The pan-European FTSEurofirst 300 index fell by 0.11%, the EuroStoxx 50 in the euro zone by 0.45% and the Stoxx 600 by 0.32%.
The United States is preparing to sanction up to 14 Chinese officials over their alleged role in excluding elected opposition officials in Hong Kong, Reuters learned from three sources, including an official US source.
This decision, which could be announced during the day, will target officials of the Chinese Communist Party, the administration of Donald Trump appearing determined to keep the pressure on Beijing in the last weeks of his mandate.
The Brexit dossier also remains a major source of nervousness for European investors who are waiting for a trade agreement between London and Brussels before the end of the transition phase on December 31.
But the main areas of divergence (the issue of fisheries, competition rules and the dispute settlement mechanism) are still on the table.
The week which begins will have as main appointment the meeting of the European Central Bank on Thursday, which should announce other support measures in the face of the economic consequences of the pandemic.
The ECB should notably increase the amount of the Emergency Purchasing Program in the face of the pandemic by 500 billion euros while extending it for six months, writes in a note Franck Dixmier at Allianz Global Investors.
On the pandemic front, the situation remains very worrying: in California, more than 23 million people are affected by a tightening of containment measures, in South Korea, a health services official says he fears a “collapse” of the the hospital system and in France, the drop in cases of contamination is slowing, which could compromise the next stages of deconfinement.
VALUES TO FOLLOW AT WALL STREET
VALUES IN EUROPE
Few of the European stock market’s compartment escaped the downturn and among the biggest drops were the banking sector which lost 1.47%, the distribution sector (-1.64%) and the automotive sector (-1.33% ).
The Kering share, which suffers from a lowering of the UBS recommendation, shows the biggest drop in the CAC 40 with a decline of 1.99%.
BNP Paribas lost 1.37% and Vinci 2.03%.
Societe Generale, which had started in the green, dropped 0.92%. The group has announced its intention to merge its two main retail banking networks, with the key to closing 600 branches out of nearly 2,100 by 2025, in order to improve its profitability.
The Italian high-end fashion group Moncler takes 4.33% after announcing the acquisition of its competitor Stone Island for an enterprise value of 1.15 billion euros.
RATES / CHANGES
The decline in safe-haven securities is benefiting government bonds: the yield on ten-year Treasuries fell by 2.5 basis points to 0.9443% and that of the ten-year German Bund by nearly four points to -0.577% .
Risk aversion favors the US dollar, which gains 0.34% against a basket of benchmark currencies.
The euro fell by 0.09% but remained above $ 1.21.
The most notable move on currencies comes to the pound sterling which falls more than 1% against the dollar and against the euro as traders increasingly fear that Britain and the European Union will fail to agree on a post-Brexit trade deal.
OIL
The oil market is on the decline due to the worsening of relations between the United States and China and the continued rise in coronavirus cases, which has required new measures to be put in place, especially in the state from California.
Brent yields 1.04% to 48.74 dollars a barrel and US light crude 1.12% to 45.74 dollars.
(Laetitia Volga, edited by Blandine Hénault)
– .
